Saudi's sell-off plan slowed down by red tape
DUBAI/RIYADH Saudi Arabia's US$300 billion (S$404 billion) privatisation programme was billed as the sale of the century when Crown Prince Mohammed Salman unveiled his plan to great fanfare.
Nineteen months later, it is moving at a snail's pace, bankers, investors and analysts familiar with the process say.
The main problems they cite are heavy bureaucracy, an inadequate legal framework, frequent changes of priority in government departments and fatigue among investors.
Some also blame a wait-and-see approach among many investors due to uncertainty about the fallout from an anti-corruption campaign in which dozens of royal family members, ministers and senior officials were rounded up early last month.
The centrepiece listing of state oil company Saudi Aramco - expected alone to raise up to US$100 billion - is on track to go ahead next year, Prince Mohammed told Reuters in October.
However, Riyadh has yet to select any exchange abroad that will handle - along with the Saudi market - what would be the biggest share flotation in history.
Sectors where the privatisation process has been slow include grains, the postal service and healthcare.
The sell-off is a cornerstone of the Prince's Vision 2030 plan to bring in fresh revenue and diversify the economy, which is in recession and blighted by high unemployment, and move away from energy exports in an era of low oil prices.
But the bankers, investors and analysts are expressing concerns including over the lack of a regulatory framework to assure would-be shareholders about how much control foreign companies could gain as a result of the stake sales, including the right to lay off staff.
The Ministry of Economy and Planning was not immediately available for comment. - REUTERS